Chicago Construction
Payment Disputes Lawyer

Payment Disputes We Handle

Non-Payment and Slow Payment: The most straightforward payment dispute: work was performed, invoices were submitted, and payment has not arrived. Sometimes the reason is a cash flow problem upstream. Other times, the paying party manufactures objections to justify withholding money. We help unpaid parties collect what they are owed and help paying parties respond to claims that lack merit.

Retainage Disputes: Retainage is the percentage of each payment held back until project completion. Disputes arise when the party holding retainage refuses to release it after the work is complete, often citing punch list items, warranty claims, or project closeout requirements that have already been met or were never agreed to.

Back Charges and Offsets: A common tactic in payment disputes is the sudden appearance of back charges: deductions for alleged defects, cleanup, damage, or delays. When back charges appear only after payment is demanded, they deserve scrutiny. We evaluate whether back charges are legitimate and challenge those that are inflated or fabricated.

Pay-When-Paid and Pay-If-Paid Clauses: Subcontracts frequently include clauses tying the subcontractor's payment to whether the GC has been paid by the owner. Illinois courts generally treat pay-when-paid language as a timing mechanism, not a permanent defense against payment. The distinction matters, and the specific contract language controls the outcome.

Prompt Payment Violations: Illinois prompt payment laws regulate how quickly contractors, subcontractors, and suppliers must be paid for construction work. These statutes are designed to protect cash flow on construction projects by establishing approval deadlines, payment timelines, and consequences for late or wrongfully withheld payments.

Both private and public construction projects in Illinois are subject to prompt payment requirements, but they are governed by different statutory frameworks depending on the type of project and the contracting entity. For private commercial projects, payment obligations are governed by the Illinois Contractor Prompt Payment Act. Public construction projects are regulated by separate statutes applicable to state agencies and local governmental bodies.

When a paying party fails to approve or dispute a payment application within the required time, or withholds payment without proper justification, the unpaid party may be entitled to statutory interest and, in some cases, additional remedies. Prompt payment violations often become central issues in construction payment disputes, particularly where delays in payment create downstream financial pressure on subcontractors and suppliers.

Disputed Change Orders: Work was requested, performed, and now the other side refuses to pay because the change was never formally approved. Change order disputes often come down to what was communicated, what was documented, and whether the work was authorized even without a signed change order.

Protecting Your Right to Payment

The strongest payment claims are built long before a dispute arises. Contractors and subcontractors who document their work, follow notice requirements, and preserve their lien rights are in a far better position when payment is withheld.

Key steps include maintaining detailed records of work performed and materials delivered, submitting pay applications on schedule and in the required format, sending preliminary notices where required to preserve mechanics lien rights, responding to back charges and deficiency notices in writing, and tracking retainage balances and release conditions.

When payment is withheld despite these steps, the next move depends on the contract terms, the amount at stake, and the available legal tools, including mechanics liens, bond claims on public projects, and direct litigation.

How We Help

We work with both sides of construction payment disputes:

For unpaid contractors and subcontractors:

• Evaluate your contract terms and identify the strongest path to payment
• File or preserve mechanics liens before deadlines expire
• Pursue claims under the Illinois Prompt Payment Act
• Challenge fabricated back charges and inflated offsets
• Negotiate settlements or litigate when necessary

For property owners and general contractors defending payment claims:

• Evaluate whether work was performed according to contract specifications
• Document legitimate deficiency and back-charge claims
• Respond to mechanics lien filings and bond claims
• Negotiate resolution without unnecessary litigation costs